Judges: Robert A. Butterworth Attorney General
Filed Date: 8/28/1998
Status: Precedential
Modified Date: 7/5/2016
The Honorable Robert F. Milligan Comptroller of Florida The Capitol Tallahassee, Florida 32399-0350
Dear Comptroller Milligan:
You ask substantially the following questions:
1. Are the registration and disciplinary records on securities dealers doing business in Florida that are held by the National Association of Securities Dealers Central Registration Depository subject to Chapter
2. If so, does an arbitration panel of the National Association of Securities Dealers have the authority to order the expungement of records?
In sum:
1. The application and disciplinary reports maintained by the National Association of Securities Dealers Central Registration Depository that are used by the Department of Banking and Finance in licensing and regulating securities dealers doing business in this state do constitute public records and are subject to Chapter
2. Such records are subject to the statutory restrictions on destruction of public records, which require agencies to adopt a schedule for the disposal of records no longer needed, subject to the approval of the Division of Library and Information Services of the Department of State.
The Department of Banking and Finance (department) is responsible for the administration and enforcement of Chapter
According to your letter, the CRD system is a computer system operated by the National Association of Securities Dealers (NASD) and is the joint property of NASD and the North American Securities Administration Association (NASAA), of which Florida is a member. The CRD is available to the states through a contract executed by NASAA, on behalf of all member states, and the NASD. By filing through the CRD, an applicant files one application for registration, designating the states in which he or she desires registration. The application is then electronically transmitted to each of the states indicated. You state that when Florida receives the application electronically, it makes the determination, based on past disciplinary history, to register or deny registration to the applicant. This decision is then entered into the CRD system.
You describe the CRD as being used by state and federal securities authorities for regulatory purposes. All state and federal enforcement actions, customer complaints and arbitrations against registrants are maintained on the CRD database and regulators therefore have access to the disciplinary history of a registrant in other jurisdictions. Thus, the system serves as a national clearinghouse of information. According to your letter, Florida uses this shared information in monitoring the activities of a broker or firm doing business within the state, or in evaluating an application.
Thus, you state that the CRD functions as a warehouse for Florida securities registration and disciplinary information. Recently, however, the NASD arbitration panels have begun issuing expungement orders that call for the expungement of those CRD records giving rise to arbitration. You have expressed your concern about the effect of such expungements.
Chapter
Florida courts have recognized that an agency's responsibility to provide public records is as broad in scope as the term "public records." The intent of the Legislature in enacting the Public Records Act and the impetus behind the adoption of Article
An agency may not avoid its responsibility under the Public Records Act by transferring custody of a record to another entity. For example, in Tober v. Sanchez,4 the court held that an official charged with the maintenance of records may not transfer actual physical custody of records to the county attorney in an effort to avoid compliance with a request for inspection pursuant to the Public Records Act. Nor may it avoid compliance with the provisions of Chapter
Where a public agency has delegated its responsibility to maintain records necessary to perform its functions, such records will be deemed accessible to the public. In Harold v. Orange County,Florida,6 the court held that where a county had hired a private company to be the construction manager on a renovation project to show compliance with a "fairness in procurement ordinance," the company's records for this purpose were public records.
Rather than seeking to avoid compliance with Chapter
Section
Thus, as provided above, expungement of the records of the Department of Banking and Finance must comply with those schedules adopted by the department and approved by the Department of State, and failure to adhere to those schedules could be construed as a violation of Chapter
Accordingly, I am of the opinion that the application and disciplinary reports maintained by the CRD and used by the department in licensing and regulating securities dealers doing business in this state are subject to the statutory restrictions on destruction of public records, which require agencies to adopt a schedule for the disposal of records no longer needed, subject to the approval of the Division of Library and Information Services of the Department of State.
Sincerely,
Robert A. Butterworth Attorney General
RAB/tjw